Determining the Risk Factor When Stock Investing -
August 3rd, 2008
The general rule regarding the investment risk is that the higher the potential gain, the higher the risk, and vice versa. This means that you need to figure out the amount of volatility in the stock prices that you can handle, without worrying yourself sick when stock investing. Once you begin investing in stock it is important that you refrain from investing all of your capital until you are certain that you are comfortable and you will not make investing errors. You may want to start with investing 15-25% of your capital initially, and then work your way up as you gain more knowledge beyond the investment basics.
Four Characteristics Necessary for Successful Stock Investing
First and for most you must have the knowledge necessary when planning your investing strategy. Will you use fundamental analysis when buying stock, or will you practice technical analysis. There are many investment strategies available to investors just getting started in learning to invest in the stock market. It is important to find out which strategy works for you so that you become knowledgeable and successful in using that technique.
Discipline is another characteristic very important in stock investing. The ability to find an investing strategy that works and to stick to it is crucial to successful investing. Many investors too often are driven by greed and fear rather than their developed techniques. Once you find a strategy that works for you, stick to it, and do not allow yourself to be overtaken by psychological issues which will inevitably lead to you to make dreaded investing mistakes.
Your time and commitment to building a strong portfolio are necessary to ensure your financial success. Be sure to map out a strategy that will fit your lifestyle and also ensure portfolio diversification. The more time you commit to ensuring a positive financial gain, the more your portfolio will thrive.
Lastly, successful stock investing requires a lot of patience. Donít let yourself jump the gun in efforts to see your portfolio grow. Allow yourself time to know develop the investment fundamentals necessary to see your financial goals come to life. The investor who establishes fluctuating time frames for holding different type of securities should have more patience knowing that their ideas are well researched. Remember, anything worth having takes a lot of time and commitment, and in with that you must first have patience. Portfolio management when stock investing is a not only a science but an art that is specific to each individual investor.